Elon Musk Challenges Reports on xAI Funding

Elon Musk predicted that equity investors in X would get a 25% stake in xAI, encouraging them to invest in digital AI.

Elon Musk refuted a report claiming that his artificial intelligence (AI) business, xAI had collected $500 million of a $1 billion objective from investors, stating that the report is not accurate.

Elon Musk refuted a user’s message on X (formerly known as Twitter), stating, “This is not accurate,” in response to a piece published by Bloomberg.

Bloomberg cites sources who indicate that discussions are taking place on a value for xAI that falls anywhere between $15 billion and $20 billion, with the possibility of adjustments occurring in the following weeks.

Reportedly,Elon Musk and investors intend to settle on the terms of the transaction within the next few weeks. Meanwhile, continued conversations are taking place over the prospect of acquiring computing power in addition to or in place of xAI stock shares.

Elon Musk stated in November 2023 that equity investors in X will receive a 25% ownership stake in xAI. This was a prediction that Musk made. Bloomberg reports that these investors are encouraged to contribute at least 25 percent of the cash they invested in X into digital artificial intelligence.

If they invested $10 billion in X, they would have the opportunity to contribute at least $2.5 billion in xAI. Musk established xAI in 2023 as an alternative to OpenAI, a company with which he had philosophical disputes.

Content from X’s social media accounts drives Grok, the chatbot developed by xAI. On December 5, 2023, xAI successfully secured a transaction for the private sale of unregistered equity securities totaling $865.3 million, according to a filing made with the United States Securities and Exchange Commission.

The xAI Form D stipulated that accredited investors would purchase the stocks, with the transaction subject to resale limitations, in accordance with Rule 506(b).

According to the document, the securities were sold on November 29, 2023, with a total value of $134.7 million.